Interventionist Supply Side Policies | IB Macroeconomics

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In this step, we will learn about interventionist supply-side policies. These policies involve the government intervening to increase potential output by investing in education, healthcare, new technology, infrastructure, and growth policies. This will result in an increase of the long-run aggregate supply curve or the Keynesian aggregate supply curve, allowing for more production with the same resources. The government can also support small businesses, provide tax exemptions and grants to new industries, and promote efficiency and capital formation. All of this will enable new emerging markets to start producing, resulting in economic growth.